Investment Details
Enter your investment parameters to calculate compound interest
₹1K₹1,00,000₹10L
1%8% per annum30%
1 Year10 Years50 Years
₹2,21,964
Final Amount After 10 Years
₹1,21,964
Total Interest Earned
Investment Breakdown
Principal Amount:₹1,00,000
Compound Interest:₹1,21,964
Simple Interest:₹80,000
Extra from Compounding:₹41,964
Effective Annual Rate:8.30%
Amount Distribution
Principal45.1%
Interest Earned54.9%
Understanding Compound Interest
The Power of Compounding
Compound interest is "interest on interest." It's calculated on the initial principal and also on the accumulated interest from previous periods. This creates exponential growth over time.
Formula
A = P(1 + r/n)^(nt)
Where A = Final amount, P = Principal, r = Annual rate, n = Compounding frequency, t = Time
Key Benefits
- Time Advantage: Earlier you start, more you earn
- Frequency Matters: More frequent compounding = higher returns
- Exponential Growth: Returns accelerate over time
- Passive Income: Money works for you automatically